Fluor Reports First Quarter 2020 Results
Fluor Corporation (NYSE: FLR) reported financial results for Q1 2020, revealing a revenue of $4.1 billion and a net loss of $171 million or $1.22 per diluted share. Consolidated segment profit rose to $52 million from $39 million year-over-year.
The quarter was affected by $353 million in non-cash impairments due to COVID-19 and commodity price drops, including $298 million in impairments in continuing operations. New awards totaled $4.2 billion with an ending backlog of $31.4 billion.
- Consolidated segment profit increased to $52 million from $39 million year-over-year.
- New awards for Q1 amounted to $4.2 billion, indicating strong project inflow.
- Ending backlog stands at $31.4 billion, reflecting a solid pipeline of future work.
- Net loss of $171 million, or $1.22 per diluted share, indicates significant financial impact.
- Non-cash impairments and charges amounting to approximately $353 million due to COVID-19 and low commodity prices.
- Energy & Chemicals segment reported a loss of $6 million compared to a profit of $12 million in Q1 2019.
IRVING, Texas--(BUSINESS WIRE)--Fluor Corporation (NYSE: FLR) today announced financial results for its quarter ended March 31, 2020. Revenue for the quarter was
Summary of Non-Cash Impairments and Charges
Continuing Operations |
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Established reserve on receivables and contract assets for certain joint venture clients in Mexico impacted by declining oil prices in the Energy & Chemicals segment |
Discontinued Operations |
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Impairment of assets held-for-sale, |
“As we previously disclosed, these impairments reflect the unprecedented impact of COVID-19 and related pressure on commodity prices,” said Carlos Hernandez, Fluor chief executive officer. “Project adjustments during the quarter were primarily related to COVID-19. We continue to have the necessary liquidity to meet all of our obligations and operate our business.”
New awards for the first quarter were
Outlook
While Fluor has suspended its guidance for 2020, the company expects to report second quarter results in approximately four weeks and third quarter results four weeks after that. The company will hold its next call with the investment community in conjunction with the release of its third quarter results.
Business Segments
The Energy & Chemicals segment reported a segment loss of
The Mining & Industrial segment reported a segment profit of
The Infrastructure & Power segment reported a segment profit of
The Government segment reported a segment profit of
The Diversified Services segment reported a segment profit of
The Other segment, which is comprised of NuScale and the Radford and Warren government projects, reported a loss of
Discontinued Operations
Results from discontinued operations, which includes the held-for-sale AMECO equipment business, were a loss of
Non-GAAP Financial Measures
This news release contains a discussion of consolidated segment profit from continuing operations that would be deemed a non-GAAP financial measure under SEC rules. Segment profit is calculated as revenue less cost of revenue and earnings attributable to noncontrolling interests excluding: corporate general and administrative expense; impairment, restructuring and other exit costs; interest expense; interest income; domestic and foreign income taxes; other non-operating income and expense items; and earnings from discontinued operations. The company believes that consolidated segment profit from continuing operations provides a meaningful perspective on its business results as it is the aggregation of individual segment profit measures that the company utilizes to evaluate and manage its business performance. A reconciliation of consolidated segment profit from continuing operations to earnings from continuing operations before taxes is included in the press release table.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is a global engineering, procurement, fabrication, construction and maintenance company with projects and offices on six continents. Fluor’s 45,000 employees build a better world and provide sustainable solutions by designing, building and maintaining safe, well executed projects. Fluor had revenue of
Forward-Looking Statements: This release may contain forward-looking statements (including without limitation statements to the effect that the Company or its management "will," "believes," "expects," "plans," "continue" is "positioned" or other similar expressions). These forward-looking statements, including statements relating to our expectations as to the filing of our quarterly reports on Form 10-Q, strategic and operation plans, and projected cash balances and liquidity are based on current management expectations and involve risks and uncertainties.
Actual results may differ materially as a result of a number of factors, including, among other things, the severity and duration of the COVID-19 pandemic and actions by governments, businesses and individuals in response to the pandemic, including the duration and severity of economic disruptions; the cyclical nature of many of the markets the Company serves, including the Company’s Energy & Chemicals segment; the Company's failure to receive new contract awards; cost overruns, project delays or other problems arising from project execution activities, including the failure to meet cost and schedule estimates; failure to remediate material weaknesses in our internal controls over financial reporting or the failure to maintain an effective system of internal controls; failure to prepare and timely file our periodic reports; the restatement of certain of our previously issued consolidated financial statements; intense competition in the industries in which we operate; failure to obtain favorable results in existing or future litigation and regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failure of our joint venture or other partners, suppliers or subcontractors to perform their obligations; cyber-security breaches; foreign economic and political uncertainties; client cancellations of, or scope adjustments to, existing contracts; failure to maintain safe worksites and international security risks; risks or uncertainties associated with events outside of our control, including weather conditions, pandemics, public health crises, political crises or other catastrophic events; the use of estimates and assumptions in preparing our financial statements; client delays or defaults in making payments; the failure of our suppliers, subcontractors and other third parties to adequately perform services under our contracts; risks related to our indebtedness; the availability of credit and restrictions imposed by credit facilities, both for the Company and our clients, suppliers, subcontractors or other partners; possible limitations on bonding or letter of credit capacity; failure to successfully implement our strategic and operational initiatives; risks or uncertainties associated with acquisitions, dispositions and investments; risks arising from the inability to successfully integrate acquired businesses; uncertainties, restrictions and regulations impacting our government contracts; the inability to hire and retain qualified personnel; the potential impact of certain tax matters; possible information technology interruptions or inability to protect intellectual property; the Company’s failure, or the failure of our agents or partners, to comply with laws; the Company's ability to secure appropriate insurance; new or changing legal requirements, including those relating to climate change and environmental, health and safety matters; liabilities associated with the performance of nuclear services; foreign currency risks; the loss of one or a few clients that account for a significant portion of the Company's revenues; damage to our reputation; failure to adequately protect intellectual property rights; asset impairments; and restrictions on possible transactions imposed by our charter documents, Delaware law and our stockholder rights agreement. Caution must be exercised in relying on these and other forward-looking statements. Due to known and unknown risks, the Company’s results may differ materially from its expectations and projections.
Additional information concerning these and other factors can be found in the Company's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Item 1A. Risk Factors" in the Company's Form 10-K filed on September 25, 2020. Such filings are available either publicly or upon request from Fluor's Investor Relations Department: (469) 398-7222. The Company disclaims any intent or obligation other than as required by law to update its forward-looking statements in light of new information or future events.
SUMMARY FINANCIALS AND U.S. GAAP RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT |
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(In millions) |
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THREE MONTHS ENDED MARCH 31 |
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2020 |
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2019 |
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Revenue |
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Energy & Chemicals |
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$ |
1,355.5 |
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$ |
1,474.7 |
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Mining & Industrial |
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1,173.9 |
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1,051.3 |
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Infrastructure & Power |
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385.9 |
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344.0 |
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Government |
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717.7 |
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756.1 |
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Diversified Services |
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457.1 |
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488.4 |
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Other |
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28.5 |
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19.1 |
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Total revenue |
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$ |
4,118.6 |
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$ |
4,133.6 |
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Segment profit (loss) $ and margin % |
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Energy & Chemicals |
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$ |
(6.4 |
) |
(0.5 |
)% |
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$ |
12.2 |
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0.8 |
% |
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Mining & Industrial |
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38.7 |
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3.3 |
% |
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27.5 |
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2.6 |
% |
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Infrastructure & Power |
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5.2 |
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1.4 |
% |
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(21.8 |
) |
(6.3 |
)% |
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Government |
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30.9 |
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4.3 |
% |
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38.4 |
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5.1 |
% |
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Diversified Services |
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5.1 |
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1.1 |
% |
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8.7 |
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1.8 |
% |
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Other |
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(21.6 |
) |
NM |
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(26.1 |
) |
NM |
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Total segment profit (loss) $ and margin %(1) |
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$ |
51.9 |
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1.3 |
% |
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$ |
38.9 |
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0.9 |
% |
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Corporate G&A |
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14.1 |
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(58.6 |
) |
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Impairment, restructuring and other exit costs |
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(297.6 |
) |
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(27.4 |
) |
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Interest expense, net |
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(6.3 |
) |
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(5.7 |
) |
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Earnings (loss) attributable to NCI from continuing operations |
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9.5 |
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23.8 |
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Earnings (loss) from continuing operations before taxes |
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(228.4 |
) |
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(29.0 |
) |
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Income tax expense (benefit) |
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(66.8 |
) |
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15.2 |
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Net earnings (loss) from continuing operations |
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$ |
(161.6 |
) |
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$ |
(44.2 |
) |
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New awards |
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Energy & Chemicals |
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$ |
1,542.3 |
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$ |
1,002.7 |
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Mining & Industrial |
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1,600.5 |
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723.2 |
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Infrastructure & Power |
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7.3 |
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533.1 |
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Government |
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684.0 |
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180.3 |
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Diversified Services |
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357.0 |
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809.8 |
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Other |
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— |
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151.1 |
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Total new awards |
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$ |
4,191.1 |
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$ |
3,400.2 |
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New awards related to projects located outside of the U.S. |
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Backlog |
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March 31,
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December 31,
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Energy & Chemicals |
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$ |
14,093.8 |
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$ |
14,128.9 |
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Mining & Industrial |
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5,502.6 |
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5,383.9 |
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Infrastructure & Power |
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5,655.0 |
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6,079.4 |
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Government |
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3,581.4 |
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3,556.1 |
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Diversified Services |
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2,343.9 |
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2,541.6 |
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Other |
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209.0 |
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244.0 |
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Total backlog |
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$ |
31,385.7 |
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$ |
31,933.9 |
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Backlog related to projects located outside of the U.S. |
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(1) |
Total segment profit (loss) is a non-GAAP financial measure. We believe that total segment profit (loss) provides a meaningful perspective on our business results as it is the aggregation of individual segment profit (loss) measures that we use to evaluate and manage our business performance. |
